Google enters travel search market

2nd Jul 2010

Google has marked its entry into the travel search market by buying the aggregator ITA Software for $700m (£461m). The cash deal, which represents the six-largest in Google’s history, will position the technology giant against the likes of Expedia, Cheapflights, Kayak.com and Microsoft’s Bing Travel.

Although an unknown name to the public, ITA is an important player, providing behind-the-scenes data on flight times, availability and pricing to travel agencies and online reservation systems, which are then used as part of customer-facing sales tools.

Google’s chief executive, Eric Schmidt, said: “Their technology opens exciting possibilities for us to create new ways for users to more easily find flight information online, and we’re looking forward to welcoming them to Google.”

A consortium of rivals including Microsoft, Kayak, Expedia, and Travelport attempted to buy ITA earlier this year as they all rely on its data and wanted to keep the company out of Google’s hands.

ITA was reportedly holding out for $1 billion, but Google secured the original $700 million price it put on the table.

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This also puts the pressure on Microsoft, and its Bing flight tracker, which aggregates flight prices and suggests whether you should buy now or wait for a better deal.

Travel agencies are worried that Google could short-circuit them by simply offering ITA’s flight data in its general search results. And they are concerned that they could find it harder to access rapidly changing information once ITA is under Google’s ownership.

Kayak’s chief marketing officer, Robert Birge, said: “They have dominance on the general search side, When you couple that with ITA’s airline relationships there is reason to be concerned.”

Marissa Mayer, Google VP for search products and user experience, said while online travel market is growing fast, competition from the likes of Google would only benefit other parties in the long-term.

She said: “Once we’ve completed our acquisition of ITA, we’ll work on creating new flight search tools that will make it easier for you to search for flights, compare flight options and prices and get you quickly to a site where you can buy your ticket.”